Work Breakdown Structure

2. Work Breakdown Structure • Work Breakdown Structure • Early compilation of significant work items w/ associated cost and schedule considerations • Overview of project • First look at drawings • Familiarize self with drawings • F 4-7, F 4-5

3. Work Breakdown Structure • Need to know what work will be in-house and what will be subbed • Usual GC work: • Hand excavation and backfill • Concrete formwork • Concrete reinforcement placement • Concrete placement • Concrete slab finishing • Structural steel erection • Rough carpentry • Finish carpentry • Siding • Window placement

4. Work Breakdown Structure • Criteria for deciding if GC does work • Labor – use subs if the trades needed are not employed by GC • Specialization – Sub may be faster/cheaper if that is what they do • Quality – problems with quality become subs problem not GC’s • Price – Sub can do work fixed price for lessthan GC • Work load – If labor tied up another jobs – give to subs • Schedule – GC can control schedule better with own workers

5. Subs • Use Sub call sheet to get interested subs • Give general details about project • Make sure subs do their own estimate • F 4-6

6. Quantity Take offs • Measure and count each item of work that GC will perform • Time consuming • What get counted? • 20% of work accounts for 80% of cost • Don’t count nails • Start at bottom and work up

7. Quantity Take offs • Forces Estimator to think like builder – makes scheduling easier • Quantities recorded and then extended out • F 4-8

8. Good Estimating habits • Clear paper trail is important • Neat and professional • Others will review and must follow logic • Mark up drawing with colored pencils and highlighters indicating what items have been taken off • Minimizes errors • Quantities should be measured, extended and summarized as they will be purchased • Waste factors for all quantities should be included • F 4-10

9. Once quantities are taken off • Group all like products together • Transfer to pricing pages • Only one line per product • F 4-9 • F 4-10

10. Pricing self Preformed Work • Productivity • Labor productivity • Man hours per unit of work • Productivity probably does not change by location – wage rate does • Determine man hours and round up to next hour - not exact science • F 4-11

11. Wage Rates • Davis Bacon for prevailing wage rates • F 4-12 • Labor burden • 30 – 60% of wage • Cover worker’s comp, union benefits, unemployment, FICA, med ins • Depend on location, craft, accident history • Material prices come directly from suppliers • Written quote if possible but can use estoppel • F 4-13

12. Pricing Subbed Work • Do quick estimate as a check on sub bids • Subs should be close to what you estimate • If too low or high don’t take • Always use subs price • Analyze F 4-14

13. Pricing Job Site General Conditions • Job site admin costs • 5 – 10 % of project bid • Need to know how long project is scheduled for • How many labor hours • Project duration vs size

14. Pricing Co Overhead Indirect Costs • Accounting, marketing, officer salaries, home office supplies • 2 – 5% of project • Depends on how many projects and total $ value • Profit – 7% of project cost

15. Estimate Summary • F 4-16 • Remove estimates and replace with sub prices • Material tax – sales tax • Contingency • Insurance • - liability insurance is volume related – depends on safety record 0.5 – 2% • Business tax • Bonds

16. Homework • Ch 4 review questions 1,6,8,9,12,14, • Exercise 1